Loan House: Citigroup

IFR Asia Awards 2019
4 min read
Prakash Chakravarti

Quick and nimble

A slowdown in the global economy and worsening trade war between the US and China intensified competition in the Asian loan market in 2019. For navigating the challenges and staying true to its clients, Citigroup is IFR Asia’s Loan House of the Year.

Citigroup maintained an edge over its rivals in 2019 with leading roles on some of the most significant event-driven financings of the year.

In a competitive market, with volumes down and other global and regional banks eager to underwrite deals to boost returns, Citigroup was quick to generate ideas for its clients and nimble in delivering on its promises.

It proved its ability to distribute risk with successful syndications from New Zealand to Indonesia, and thought outside the box with complex corporate restructurings from Hong Kong to Italy.

Two Asian borrowers that completed transformational deals with multiple arrangers in 2019 singled out Citigroup for particular praise, underlining the bank’s commitment to its clients.

“Despite heightened global market volatility, Citi continued to lead episodic, ‘must-do’ transactions with innovative structuring coupled with superior understanding of the market and strategic deployment of its balance sheet vis-à-vis prudent capital management,” said Benjamin Ng, head of debt syndicate and acquisition finance Asia at Citigroup.

The bank kicked off IFR’s review period with a €2.2bn (US$2.5bn) five-year loan to fund Hong Kong-listed Anta Sports Products’ takeover of Finland’s Amer Sports with a consortium of other investors. Citigroup was sole financial adviser to the Chinese sporting goods giant and joint global coordinator on the Anta financing, which closed with 21 banks in March after a hugely successful syndication. It also helped bookrun a €2.015bn non-recourse loan at the target level.

The US bank was firmly in the driving seat on a HK$25.2bn (US$3.23bn) multi-tranche loan supporting the take-private of Hong Kong-listed Hopewell Holdings by Hopewell chairman Gordon Wu. Citigroup, as sole underwriter and exclusive financial adviser, closed the loan within three weeks around the end of December 2018 after attracting 14 other banks in senior syndication.

Citigroup again distinguished itself as sole financial adviser and hedging coordinator on a reorganisation of CK Hutchison Holdings’ European, Hong Kong and Macau telecom operations. Citigroup and HSBC provided a €10.4bn bridge loan in July to refinance high-yielding debt at Wind Tre, CK Hutch’s wholly owned Italian mobile operator. The two banks then led a loan and bond takeout in October at investment-grade pricing, with the €4.56bn multi-tranche loan drawing an overwhelming response from 30 other lenders.

The same month, Citigroup teamed up with HSBC again to arrange a US$1.16bn loan-and-bond refinancing for Vietnamese coal-fired power plant operator AES-VCM Mong Duong Power, negotiating a refinancing with existing lenders to cut the project’s interest costs. The US$484.71m loan component attracted 15 other lenders.

Similarly, Citigroup acted as one of three global coordinators on another loan-bond combo for Indonesian textile producer Sri Rejeki Isman, placing a US$350m three-year loan that attracted 24 other banks before launching a US$225m bond in October, only weeks after rival Delta Merlin Dunia Textile defaulted on its offshore debt.

Citigroup impressed in the aviation sector with a left lead role on a US$597.87m non-recourse aircraft financing in June for US alternative investment firm Castlelake’s purchase of aircraft from Malaysia’s flagship budget airline AirAsia. A month later the US bank, along with 24 other lenders, landed a US$1.45bn multi-tranche borrowing for BOC Aviation, which was returning within nine months of completing a smaller US$750m loan.

China Network Systems, Taiwan’s largest cable TV operator, relied on Citigroup once again, appointing it as sole coordinator to amend and extend a NT$46.742bn (US$1.5bn) seven-year loan signed in 2014. The A&E, completed in January, attracted 13 lenders.

Among other notable financings, Citigroup closed a NZ$1.49bn (US$954m) multi-tranche loan in September backing the purchase of Vodafone Group’s New Zealand business by Canada’s Brookfield Asset Management. Citigroup was one of six bookrunners on the deal, which closed with 17 other banks joining.

It also needed to overcome challenges on a €260m loan for Philippine port operator International Container Terminal Services after the suspension of a concession agreement in Sudan. Citigroup, as one of two bookrunners, managed to close syndication with four more lenders after an initial delay.

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